Another way to think of "debt" is "money supply"
The more debt the US government goes into, the more money there is to go around.
US Published National Debt: $28T. The Truth: $146T. Each Taxpayer's Share: $951k
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Re: US Published National Debt: $28T. The Truth: $146T. Each Taxpayer's Share: $951k
#92It's a misleading way of calculating the number, since it refers to all of the future debt obligations, including Social Security out many decades -- but also ignoring the fact that we'll be collecting taxes all that time. It's a bit like concluding that you're a million dollars in debt because you are going to need to buy food for the rest of your life. I suppose it's true -- it is something you need to plan for. Bu…
> The meaningful number is 2033, the year Social Security is projected to run out of money. This comment is excellent, except for one clarification: "Social Security" is not going to run out of money. The "Old-Age and Survivors Insurance Trust Fund" will run out of money in 2033 (the disability insurance fund is solvent until 2057). After this happens -- and assuming no action by Congress -- Social Security will stil…
the government can't be insolvent to by owing money to itself.
Re: US Published National Debt: $28T. The Truth: $146T. Each Taxpayer's Share: $951k
#93Flat tax, cut spending, cut welfare programs, fire everyone in the government who overspends the budget during their term. Problem solved.
Ahhh I love left wing hacker news. Lots of down votes on conservative principles, zero responses.
Re: US Published National Debt: $28T. The Truth: $146T. Each Taxpayer's Share: $951k
#94I don’t understand how social security isn’t a pyramid scheme. It seems to me like something we should just do away with.
https://www.washingtonpost.com/blogs/ezra-klein/post/is-soci...
> The superficial similarity to a Ponzi scheme is that different sets of investors are relying on future investors, or at least future growth, to get paid back. But that defines a Ponzi scheme so broadly as to make the term meaningless. In that definition, any intergenerational transfer system is a Ponzi scheme.
> What makes a Ponzi scheme a Ponzi scheme is that it’s a giant fraud. People think they’re investing in postal stamps. Their money is actually being invested in nothing. In Social Security, conversely, it’s perfectly clear what is going on. Every year, Social Security’s actuaries release an insanely detailed report on the system’s finances, its balance of payments, the potential problems it could face, and so on. You can read their report here. In a Ponzi scheme, the finances are a secret, and that’s central to the enterprise. In Social Security, they are, as a matter of law, public.
Re: US Published National Debt: $28T. The Truth: $146T. Each Taxpayer's Share: $951k
#95If America defaults and wipes the foreign debt, what happens worldwide?
Why would it default? It has USD (fiat it controls) denominated debt, it can literally pay any debt through monitory expansion.
Re: US Published National Debt: $28T. The Truth: $146T. Each Taxpayer's Share: $951k
#96This is more a discussion of semantics than about the amount itself. The way I read the statistics is that the current debt is $28T of money that is already spent while the quoted debt of $146T is the amount of money needed to be spent to fill full current promises and expenses . It's interesting that since the USA got off the gold standard in 1971[1], and thereby all countries that had a currency backed by dollars,…
> Can you imagine an piece of IKEA furniture being used daily and lasting for >40 years? Yeah. IKEA's not bad.
It varies a lot though. Some of their stuff lasts a long time and some of it falls apart when you move.
Re: US Published National Debt: $28T. The Truth: $146T. Each Taxpayer's Share: $951k
#97Earlier quoted context omitted.
Sure it would. We could pay the entire thing off with that. https://www.cnbc.com/2021/06/23/how-much-wealth-top-1percent... > The wealthiest 1% of Americans controlled about $41.52 trillion in the first quarter, according to Federal Reserve data released Monday. Can't do it again as easily, of course.
Most rich people don’t have all their wealth in cold hard cash. They have assets. You can’t force rich people to sell their assets. And if you did, it would crash the economy.
No sane person is sitting on mountains of cash.
Re: US Published National Debt: $28T. The Truth: $146T. Each Taxpayer's Share: $951k
#98Numerous good responses already, but basically the first thing you should do when you see anyone talk about The Debt is say "Okay, now do assets and revenues." The second thing you should do is note that talk of "unfunded liabilities" is a 10 year old debunked talking point that invites you to imagine future spending over an infinite horizon without setting it side by side with future revenue. Nobody will ever give y…
And since that $146t figure is long-term obligations looking out decades, the US net worth also must be adjusted for future terms matching those forward decades. Even a modest growth rate applied to the US asset base over 30-40 years produces an extraordinary sum. As you note, the people that like to pretend the $146t is actual debt, go out of their way to evade such discussions.
Since the peak of the real-estate bubble circa 2007 (right before household assets dropped), US household wealth has more than doubled, while household debt has remained very tame by comparison.
The gain has roughly been $66t to ~$145t since 2007, in household assets. The debt increase has been $14.6t to ~$17.3t.
So nearly $80 trillion in added wealth, stacked against $2.7 trillion in new debt, over ~14 years. That's beyond extraordinary. You can hear the skeptics though: yeah, but that's bubble wealth; ok, chop it in half, $40t stacked against $2.7t in new debt, still extraordinary.
Over that time US households produced more new wealth than China did, to put that gain into perspective (and yes, most of it went to the top 1/3).
Also interesting, the debt of US states has shown no consequential increase in those 14 years. The total debt of the states went from $3t to $3.23t. That's another great positive for the US when it comes to debt (stacked against the growing federal debt mess of course). States fortunately often have restrictions on deficits.
Re: US Published National Debt: $28T. The Truth: $146T. Each Taxpayer's Share: $951k
#99The US National Debt being viewed like a bad loan is a load of BS - that's a sum invested and leveraged against the projected continued growth of the country and, honestly, nobody on earth has the ability to forcefully collect from the US government.
And even if they could collect, its in US Dollars, which they can print.
That, unfortunately, is not as great of a loophole as you might imagine - you can ask interwar Germany and the Papiermark[1] how that worked out for them. Effective debt (a concept I'm coining here) is essentially the product of: 1) the abstract value of a debt and 2) the ability of anyone to actually collect that debt - this is why it's hard to get a loan in the US if you're a government backed organization in Russia - since the issuing bank can only expect repayment on pure faith. The US government can now (and for the foreseeable future) fend off any potential collection attempts with a combination of military might, economic might, international good will and self-destructive power - this may change in the future (at which point the debt will become a lot more critical) but for the time being the US is pretty immune to collections. It always pays back its interest (that itself contributes to the continued good will) but nobody can forcefully collect the lump sum of debt.
1. https://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_R...
Re: US Published National Debt: $28T. The Truth: $146T. Each Taxpayer's Share: $951k
#100Earlier quoted context omitted.
As far as I understand it, it has nothing to do with creditor’s ability to collect but the interest future creditors will be willing to part with their money for. With an institution even a fraction the size of the US federal government, I don’t think people can reasonably collect, and instead the incentive to take care of current creditors is to give future creditors confidence that their investment is safe. Histori…
Who are those creditors? Who set's that interest rate? It's largely the FED, right? What prevents the FED from keeping the interests low, if the US-Gov does not want to pay?
When we talk about debt, we are usually talking about bills, notes, and bonds the US treasury issues. The Federal reserve does buy lots of treasury bonds but it’s a fraction of the public market as a whole. Most of the debt is held by American institutions and private individuals, then American government agencies and the fed, then the remaining third or so are foreign governments/institutions.
https://www.thebalance.com/who-owns-the-u-s-national-debt-33...
My understanding is that the Fed buys treasuries at the market rate and does attempt to keep interest low that way by creating some demand at the current rate, but that it’s ability to influence the treasury rates is not as important as the perception that American debt is rock solid. It works by buying a small amount to “soothe markets” and keep other players interested, and is unable to create all the demand by itself without basically destroying the value of the dollar.
Disclaimer: I’m not an economist and probably have massive gaps in the details and mechanics of The US’s fiscal policy (or monetary when we talk about fed creating credit to buy treasuries).